Townsend moved to the Justice Department in the early 1990s to work on international legal matters.[11] In 1991, she worked in the Office of the Attorney General to assist in establishing the newly created Office of International Programs, the predecessor to the Executive Office for National Security.[8] In December 1993, she joined the Criminal Division where she served as Chief of Staff to the Assistant Attorney General,[8] where she took part in establishing the Division's international training and rule of law programs.[8]

During the Clinton administration, Townsend served in a series of positions at the Justice Department, eventually working as intelligence policy counsel for Attorney General Janet Reno.[10] She served as Director of the Office of International Affairs in the Criminal Division from November 1995 until November 1997, when she was appointed Acting Deputy Assistant Attorney General.[8] Townsend was appointed Counsel for Intelligence Policy in March 1998, heading the office of Intelligence Policy and Review, whose various functions included approving intelligence-gathering activities related to the Foreign Intelligence Surveillance Act.[12][8] Townsend managed the Justice Department's Office of Intelligence Policy and Review until 2001. She was one of Reno's key advisers, acting as a "back channel" between the attorney general and FBI Special Agent John P. O'Neill, who was also her friend.[13] The incoming Bush administration did not opt to keep Townsend on. Instead, she served as Assistant Commandant for Intelligence for the United States Coast Guard. While she was on maternity leave during the September 11 attacks in 2001, Townsend assisted the Coast Guard in updating intelligence legislation to switch the branch's priority from drug smuggling to the vulnerability of U.S. ports.[13]

Despite worries about Townsend's past as a Democratic appointee, Secretary of State Condoleezza Rice hired her for the National Security Council in Spring 2003 at the urging of counterterrorism chief John A. Gordon and Homeland Security Advisor Richard A. Clarke.[13] In December 2003, she coordinated government terrorism responses that led to the grounding of flights from Europe during the holiday season.[13] She was appointed Assistant to the President for Homeland Security and Counterterrorism on May 28, 2004.[5][10] During her tenure, she oversaw an intelligence reorganization and conducted the first post-9/11 review of the White House's anti-terrorism campaign.[13] Townsend served as the public face of the Bush administration while it was under criticism for allegedly overreacting to dated intelligence[11] in its decision to raise terrorist threat levels during an election season.[13] She also inspected Iraq's Abu Ghraib prison as an envoy of President Bush. Townsend was tapped to implement broad changes in the intelligence community recommended by a presidential commission headed by former Senator Chuck Robb and U.S. District Judge Laurence Silberman.[13]

In a 2012 Salon article by journalist Glenn Greenwald, Townsend and other Republicans were reported to have taken speaking fees from Mojahedin-e Khalq (MEK, the People's Mujahedin of Iran), a State Department-designated foreign terrorist organization at that time, leading Greenwald to argue that Townsend's earlier support for a Supreme Court decision constraining speech associated with material support for such groups was hypocritical.[17] Townsend had been vocal in her support for the Supreme Court's decision in the case of Holder v. Humanitarian Law Project, which Wolf Blitzer of CNN described thus: "If you’re thinking about even voicing support for a terrorist group, don’t do it because the government can come down hard on you and the Supreme Court said the government has every right to do so."[17][18]

Frances Fragos married lawyer John Michael Townsend on October 8, 1994 in an Episcopal ceremony at Manhattan's Church of the Incarnation.[3] As of 2006, they have two children, both sons.[6] With a self-professed "triple type-A" personality,[10] Townsend has been described as having a characteristic bluntness and a "sometimes salty, streetwise style"[11] that once led her coworkers to nickname her "The Hurricane".[5]

^As described by Greenwald, in the 6-3 ruling decision in Holder v. Humanitarian Law:

the Court upheld the Obama DOJ’s very broad interpretation of the statute that criminalizes the providing of "material support" to groups formally designated by the State Department as Terrorist organizations. The five-judge conservative bloc (along with Justice Stevens) held that pure political speech could be permissibly criminalized as “material support for Terrorism” consistent with the First Amendment if the “advocacy [is] performed in coordination with, or at the direction of, a foreign terrorist organization”.